Le President de la Republique, Nicolas "I heart Carla" Sarkozy, apparently threatened to pull France out of the Euro during last week's negotiations on the EU rescue plan, if the other EU countries did not sign up to the deal. This was aimed particularly at Merkel, as German citizens are less than impressed at the idea of hurling yet more money into the black hole of the EU.
Sarkozy demanded "a compromise from everyone to support Greece ... or France would reconsider its position in the euro," according to one source cited by El País.
"Sarkozy went as far as banging his fist on the table and threatening to leave the euro," according to one unnamed Socialist leader quoted, who was at the meeting with Zapatero. "That obliged Angela Merkel to bend and reach an agreement."
Hmm, "bend and reach", hey? "Bend over and hold onto something" may have been a better description of how that situation unfolded.
1. The Euro really is not that stable. Even if it was just posturing, the fact he would say it all shows he feels it can be done. If France can, why not Greece, or indeed Germany.
2. Zealotry is alive and well in the Eurozone. Sarko was willing to sacrifice everything to save Greece, while Merkel sacrificed her political career by agreeing to these terms.
It strikes me that the Eurozone has a real problem at the moment. They believe they are "above the market", and should not bow to speculators. However, so many of the barometers they use are entirely market-driven - the strength of the Euro, the Bond markets, even the stock markets as an indicator of economic recovery. They seem to have forgotten that the "market" is just a bunch of people, many of whom are based within the Eurozone and thus are not disinterested, Soros-style investors crushing the Euro for personal gain.
Gold is now at over 1,000 Euros per ounce, an insane level, and if the Euro falls below 1.24 against the USD then it really could go all the way down to 1.00.
It's all very far from over.